The Pakistan Banks Association has rejected claims of coercion in the rollout of the Zarkhez-e (Asaan Digital Zarai Qarza) scheme, arguing that participation by banks reflects commercial judgment rather than regulatory pressure.

In a statement addressing recent criticism, the association said skepticism over the initiative's viability overlooks its structural design. It stressed that eligibility under Zarkhez-e does not amount to automatic entitlement, as lending decisions remain firmly within the discretion of individual banks.

According to the PBA, institutions retain authority over credit assessments and may obtain security and collateral consistent with their internal risk frameworks. The association emphasised that the scheme does not impose rigid lending mandates.

Responding to suggestions of 'directed lending', the banking body maintained that its engagement with the programme is not the result of pressure from the State Bank of Pakistan or the Ministry of Finance. Instead, it characterised the initiative as a commercially structured incentive-based model.

The association acknowledged broader concerns about Pakistan's recovery laws, noting that a weak enforcement framework poses genuine challenges for financial institutions. However, it argued that Zarkhez-e is designed to mitigate such risks.

The scheme includes a 10% first-loss guarantee backed by the government, providing a buffer against defaults that is typically absent in open-market lending. In addition, the framework allows for crop loan insurance to reduce portfolio risk, though participation in this insurance mechanism is optional rather than compulsory.

By clarifying these features, the PBA sought to frame Zarkhez-e as a collaborative effort to modernise agricultural finance in Pakistan, grounded in risk-sharing incentives rather than compulsion.